It goes without saying that retirement ain’t what it used to be. The recession decimated the nest eggs of many Americans, and a tough job market has prevented a lot of people from putting money toward their golden years.
“The traditional industry definition of retirement is for people to save, turn 65, stop working, and never set their alarm clocks again,” says Catherine Collinson, president of the Transamerica Center for Retirement Studies. “But that’s just not the reality today.”
So is this new face of retirement a good or a bad thing? Collinson says that it depends on your mind-set—some retirees see work as a burden, while others view it as an opportunity to try something new and stay engaged.
Given how much has changed, it’s not surprising that there’s a whole new lexicon of retirement terms out there. (What in the world is a SKIer, anyway?) Here, Campbell Harvey, a Duke University finance professor and author of The New York Times Dictionary of Money and Investing, weighs in on the new lingo.
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Definition: Starting another career postretirement, typically in a different field from your original job path.
The expert says: Those who retire financially comfortable can take on more risk and start something new, Harvey says, adding that people are also living longer, so it’s becoming more feasible for this to happen. Bureau of Labor Statistics data shows that seniors are increasingly staying in the workforce or going back to work.
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Definition: Acronym for “Spending the Kids’ Inheritance.” These retirees burn through their net worths via travel, shopping, and whatever else they please. They plan to “die broke.”
The expert says: SKIing is especially common in cases where kids are living “a lifestyle way beyond what their parents’ lifestyle ever was,” says Harvey.
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Definition: Companies lure workers on the verge of retirement to stay by offering them flexible hours and continued benefits.
The expert says: This type of retirement plan is mutually beneficial to employee and employer. Workers boost savings, stay active, and keep their benefits, says Harvey—while employers retain an experienced worker who can train others. The practice is growing in popularity as boomers retire en masse. A recent study found that 73 percent of companies surveyed are willing to transition older employees to flexible work schedules as they approach retirement.
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Definition: Money made at a temp or part-time job purely to fund something fun.
The expert says: Nothing new. The basic idea here is that if you want something above and beyond what your retirement income allows for, you pick up some work to cover it.
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Definition: A situation in which adult children have to fund their parents’ retirement expenses, such as medical care.
The expert says: This commonly occurs when retirees don’t have adequate liquid assets to cover health care or living expenses, according to Harvey.
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Definition: Someone who retires and then starts a business.
The expert says: When entrepreneurs retire, they often realize that they’ve lost something that challenges them and keeps their interest, so they look to fill that void by launching a business, says Harvey. Data from AARP shows that of the 76 million people who are 50-plus and nearing retirement, half are interested in starting their own businesses.